I'm sorry, but it is true.
It is worth noting that Google did not start charging a monthly fee for Reader. If they had, I suspect the vast majority of users - including API users - would have gladly paid for it. Rather, they pulled the plug completely, and the only reason they did that was because they simply did not give a shit. It was an utterly disrespectful thing to do to users who came to rely on the service.
There's also the fact that Reader crushed most of its competition after it came out[1]. It was like a Walmart that opened smack in the middle of a town - none of the smaller shops could compete with it and they closed. In the case of Reader, this was okay with most people, since it was free at the time. But then Google said, "welp, this isn't making us any money" and shut it down. Too bad the noteworthy competitors were long gone by then. That's the absurdity of this whole thing.
To go back to the Walmart example, it's like a Walmart that comes into town, forces the smaller shops to close, and then leaves town a few years later. Where will the townspeople do their shopping now?
I know it isn't a perfect analogy, but I think it is accurate enough to get the point across: if you come out with a free service and end up displacing everyone else in the market, then you have an ethical responsibility to at least try to continue the service in some shape or form. Start charging for it and explain why you are doing it. Some may complain but most will understand and agree to pay since they have come to appreciate it and rely on it. Or serve ads, somehow. But whatever you do, don't just shut it down citing lack of profits. Because that just makes you look like a tool.
[1]Interestingly enough, while I was searching past HN submissions to find that story, I came across this one from 4 years ago, titled "Is Google Reader next on the chopping block?" The article itself seems gone but the comments are still there: https://news.ycombinator.com/item?id=435555. The comments themselves are chilling, but even more so because of their similarities to the ones on the more recent "With Google Reader gone, is Google Scholar next?" submission: https://news.ycombinator.com/item?id=5434021